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An organization chart ("org chart" for short) is a visual representation of a company's structure that outlines the relationships between different roles, departments, and individuals within the organization. It typically depicts reporting relationships, responsibilities, and sometimes the communication channels that exist among employees.
Why is an org chart important?
An org chart provides clarity and transparency within the company. By visually identifying the chain of command, an org chart helps employees better understand:
their individual roles and responsibilities
who to approach with questions, and
how to streamline decision-making.
An org chart also plays a crucial role in employee performance and engagement. The transparency provided by an org chart allows employees to identify career development and growth opportunities within the organization, as well as who possesses the skills and experience needed for progression (allowing for possible mentorship opportunities). An org chart can encourage collaboration and teamwork as employees recognize how their work interconnects with others across different departments.
Types of org charts
Org charts can take many formats. Here are a few of the most commonly used:
Hierarchical Chart
This chart is a traditional top-down representation with clear reporting lines. It's easy to understand and clearly identifies the chain of command, but can be rigid and doesn't represent how teams interact with each other.
Matrix Chart
A matrix org chart adds project managers to a hierarchical model to create a grid that identifies traditional chain-of-command vertically and project-based reporting horizontally. This chart allows for collaboration across divisions and is used by companies including Spotify and Google, but can result in confusion and conflicting priorities due to dual reporting lines.
Network Chart
This decentralized org chart emphasizes relationships and connections between individuals, teams, or locations, rather than hierarchy. It can promote collaboration and innovation, but can also be complex to visualize and manage. Starbucks and Zara are two well-known companies that use network charts.
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